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FTC sues to unwind Marlboro owner's $12.8 billion Juul investment
While e-cigarettes may have been quickly replaced in headlines by a new threat to public health, it appears the government has not forgotten about vaping. However, this time the news isn't about banning flavored pods or raising the legal age, instead the FTC is suing to unwind Altria's $12.8 billion investment in vaping giant Juul. While the folks at Altria might be having similar thoughts after lawsuits and regulation cut the value of that stake to around $4.2 billion in January, the feds take issue with the way the two companies "turned from competitors to collaborators by eliminating competition and sharing in Juul's profits." At the time the investment even upset people within Juul, due to the suddenly hypocritical stance of claiming to be a way to help people quit smoking despite having a major investor that's a tobacco giant (Altria owns brands like Marlboro and Virginia Slims). According to the FTC, the partnership came about after Altria agreed not to compete with the upstart in exchange for getting that big stake. In a statement, Altria VP Murray Garnick said "We believe that our investment in JUUL does not harm competition and that the FTC misunderstood the facts. We are disappointed with the FTC's decision, believe we have a strong defense and will vigorously defend our investment."
After Math: That's something at least
This week has been a real kick in the teeth. The UK actually stepped off the Brexit precipice while the US Congress barely went through the motions of Trump's impeachment trial. Worst of all Elon Musk released a truly cringeworthy EDM track because sure, it's not like the week was going to be getting any worse at that point. Still there were a few high points, read on for the week's headlines that helped get us to Sunday.
FDA accuses Juul of undermining efforts to prevent teen vaping
Many people raised eyebrows when Marlboro owner Altria bought a $12.8 billion stake in the vaping giant Juul, and that now includes the US Food and Drug Administration. Commissioner Scott Gottlieb has requested a joint meeting with the CEOs of Juul and Altria over concerns their statements "contradict" commitments they made in October to reduce teen vaping. The official wanted both executives to explain how their deal affects their plans to curb youth vape use, and noted that data suggested trends were headed in the wrong direction.
Marlboro owner invests $12.8 billion in e-cigarette maker Juul
Tobacco giant Altria (which owns Marlboro and Virginia Slims) has bought a 35 percent stake in Juul for $12.8 billion. The major deal pegs the e-cigarette company's valuation at $38 billion, which more than doubles its value since a previous investment in July. Altria will place Juul's products next to its cigarettes on retail shelves, and, pending antitrust approval, hold a third of Juul's board seats.
